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Apr 30, 2009

Together, We All Pay More For Healthcare

Health Care's Simple Economics
04/30/09 - by Donald J. Boudreaux, Chairman of the Economics Department at George Mason University.

Parable: "The ten of us went to dinner together. We agreed to split the bill. I ordered a bottle of wine, the Steak Grande, and the Fudge Remorse dessert. Eating as a group is quite expensive."

[edited] Consider Medicaid and Medicare, huge socialized health-care programs funded with tax dollars. Millions of Americans covered by them consume medical services without paying the full costs. The result is that these services are over-consumed.

Russell Roberts is my George Mason University colleague. He asks, if you go to dinner with a large group of strangers, and you know that the bill will be split evenly, will you order pricier dishes and drinks than if you were paying only for yourself?

The answer is surely "yes." Let's say that you'd be content to order the pork chop priced at $15, but would get even greater enjoyment from ordering the rack of lamb priced at $25. If you alone were responsible for your tab, you'd order the lamb only if it is worth to you at least the extra $10 that it costs. So suppose that you value the lamb by only $8 more than you value the pork chop. In that case, you'd order the pork chop. You wouldn't spend an extra $10 to get extra satisfaction worth only $8.

But if the bill is evenly shared among yourself and nine others, then if you order the lamb, your share of the higher bill will be only $1. That's $10 split evenly 10 ways. You'll order the lamb.

Such sharing of our medical-care bills takes place now on a massive scale. It is impossible to see how expanding this sharing will reduce the bill for each of us.

Apr 29, 2009

Fact Check on Obama

FACT CHECK: Obama disowns deficit he helped shape
04/29/09 - Associated Press by Calvin Woodward at KnoxNews.com

Calvin Woodward examines and criticizes Obama's statements. [edited]

Obama met citizens Wednesday at a high school in Arnold, MO in advance of his prime-time news conference. Both forums were a platform to review his progress at the 100-day mark and look ahead.

Here are Obama's claims. The analysis is in the linked article.

  • I am not responsible for the huge budget deficit waiting for me on Day One.
  • The Recovery Act has already saved or created over 150,000 jobs.
  • This budget will strengthen our economy.

    - Investments in education will equip our workers with the right skills and training;

    - Investments in renewable energy will create millions of jobs and new industries;

    - Investments in health care will cut costs for families and businesses;

  • I inherited a $1.3 trillion deficit. That wasn't me. There is almost uniform consensus among economists that we are in the middle of the biggest financial crisis since the Great Depression. We had to do a stimulus package, and we had to do something about the banks. Those are one-time charges
  • We know that the more we do to prevent disease, the more we can obtain serious savings down the road. If we make those investments, we will save huge amounts of money in the long term.
  • We can support Social Security benefits by raising the cap on the payroll tax.
  • I hope that by working in a bipartisan fashion, we are going to get a health care reform bill by the end of the year, and we'll make the kinds of investments that will make everybody healthier.

Apr 27, 2009

2006 Tax Comparisons

The information below for tax year 2006 is from the Tax Foundation "Federal Individual Income Tax Data 07/18/08".
These tables are also available as an Excel workbook.

This page shows a scrolled version of the tables. You can also view a wide format version with no need to scroll.

2006 Tax Data Split Into Separate AGI Slices

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
Slice Rank Tax Returns (MM) AGI Min Total AGI (B) Percent of AGI Tax Paid   (B) Tax Rate on AGI Tax Rate Ratio Tax Share Slice AGI Per Return Tax Per Return Tax Per Return Ratio
  All 100% 135.7 $0 $8,122 100% $1,024 13% 1.8 100%   All $59,844 $7,543 2.3
  1% 99% 1.4 388,806 1,792 22% 408 23% 3.3 40%   1% 1,320,289 300,893 92.8
  4% 95% 5.4 153,542 1,186 15% 207 17% 2.5 20%   4% 218,434 38,187 11.8
  5% 90% 6.8 108,904 865 11% 109 13% 1.8 11%   5% 127,532 16,071 5.0
15% 75% 20.4 64,702 1,693 21% 158 9% 1.3 15% 15% 83,147 7,781 2.4
25% 50% 33.9 31,987 1,570 19% 110 7% 1.0 11% 25% 46,265 3,243 1.0
50% 0% 67.9 0 1,016 13% 31 3% 0.43 3% 50% 14,979 450 0.14

This table reports data from the Internal Revenue Service about all tax returns showing positive AGI (Adjusted Gross Income) whether or not any tax was owed.

Each row is data for a "slice" of taxpayers. The usual IRS data reports averages for groups of taxpayers from the top (as shown in the table far below). The IRS data reports on the top 1% 5% 10% 25% 50% and All returns. I split out each slice by computing the difference between groups.

This presentation makes it easy to compare your situation to your "tax neighbors". Are their taxes fair? Should they pay so much less or more than you do?

The first row is for all returns averaged together. The last row reports the 50% of tax returns with the lowest AGI's. The row "25%" reports the next one-quarter of tax returns having higher AGI's. The next higher rows report the one-quarter of tax returns with the highest AGI's.

The "25% row in yellow is the one I use for overall comparison. It is the "middle class" slice, the second one-quarter of returns from the top.

Column (10) "Tax Share" is the one usually quoted in articles. The top 1% of taxpayers paid 40% of the income tax in 2006. The top 10% paid altogether 71% of the tax, amounting to $725 billion.

Compare this to the additional $4-6 trillion in borrowings that the Obama administration wants to spend. That additional spending is 6-8 times as much as the total tax paid by the upper 10% of taxpayers. So, who is going to pay for that additional spending?

A middle class taxpayer with $46,300 of AGI paid about $3,300 in federal tax. $4-6 trillion in extra spending, spread out in proportion among all taxpayers, would require a payment of $13,000 to $20,000 from that person, being 28-42% of one year's AGI.

An upper class taxpayer at the 90% rank now pays 13% of AGI in tax. He would have to pay 52-78% of one year's AGI to pay for the increased spending, if spread in proportion among taxpayers.

Column (9) "Tax Rate Ratio" compares your effective tax rate to your tax neighbor. The middle class, yellow row is set as the standard (set to 1.0), paying 7% of AGI as tax. Note that this is the "whole" rate, 7% of total AGI. It is not the "marginal" rate that is quoted in the tax tables in tax return instructions.

The average tax on the first 50% is a whole rate of 3% on AGI, a .43 fraction of the rate paid by the middle class slice. Someone earning about $130,000 paid a whole tax rate of 13%, which is 1.8 times the rate paid by the middle class slice.

From the Tax Foundation link, 43 million tax returns had exemptions, deductions, and tax credits resulting in zero tax. Some even received money back from the IRS for the Earned Income Tax Credit (and other credits), which are not included in the IRS data. These returns are part of the lowest 50%, but are not split out because they are not separately reported.


  (1)  Slice - Groups of taxpayers according to AGI (Adjusted Gross Income). AGI is total income less deductions for such as IRA contributions, and moving and business expenses. You get Taxable Income when you subtract deductions, allowances for dependents, and qualified expenses (eg. child care).

  (2)  Rank - Where each row ranks according to AGI. The yellow row represents 25% of all individual tax returns, and sits above 50% of all tax returns.

  (3)  Tax Returns (MM) - The millions of tax returns in the slice, 33.2 million returns in the yellow slice.

  (4)  AGI Min - The minimum AGI for returns in this slice. Returns in the yellow slice have AGI between $30,881 and the next higher slice ($62,068).

  (5)  Total AGI (B) - All AGI reported in this slice.

  (6)  Percent of AGI - (Slice AGI)/(Total AGI). The percent of AGI contained in this slice. Note that the slices are not equally wide and have different AGI's, so these numbers don't relate easily to each other.

  (7)  Tax Paid (B) - Total tax paid for this slice, in billions.

  (8)  Tax Rate on AGI - (Col 7)/(Col 5). Tax paid as a percent of AGI.

  (9)  Tax Rate Ratio - The effective tax rate for this slice compared to the 7% tax rate for the "middle class" yellow slice. For example, the value 1.8 for the "5%" row says that those people are paying tax at a rate that is 1.8 times the rate for the "middle class". The ratio is 1.0 in the yellow row because we are comparing this row to itself.

(10)  Tax Share - The percent of total tax collections paid by this slice.

(11)  Slice - Repeats (Col 1) for convenience in reading the table.

(12)  AGI Per Return - The average AGI reported for each return in the slice.

(13)  Tax Per Return - The average tax paid for each return in the slice.

(14)  Tax Per Return Ratio - This compares the amount of tax paid by an average individual in each slice, to the average "middle class" return in the yellow row.


2006 Tax Data by Upper AGI Groups

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Group Tax Returns (MM) AGI Min Total AGI (B) Percent of AGI Tax Paid   (B) Tax Rate on AGI Tax Rate Ratio Tax Share Group AGI Per Return Tax Per Return
All 135.7 $0 $8,122 100% $1,024 13% 0.9 100% All $59,844 $7,543
Top   1% 1.4 388,806 1,792 22% 408 23% 1.6 40% Top   1% 1,320,289 300,893
5% 6.8 153,542 2,978 37% 616 21% 1.5 60% 5% 438,805 90,729
10% 13.6 108,904 3,843 47% 725 19% 1.3 71% 10% 283,169 53,400
25% 33.9 64,702 5,536 68% 883 16% 1.1 86% 25% 163,155 26,029
50% 67.9 31,987 7,106 87% 993 14% 1.0 97% 50% 104,710 14,636
Low 50% 67.9 0 1,016 13% 31 3% 0.22 3% Low 50% 14,979 450

This table gives Federal income tax statistics in the usual way, reporting on groups from the top by AGI. For example, column (11) in yellow reports that the top 1% of tax returns collectively paid 40% of all Federal income tax, and the top 5% collectively paid 60%.

This gives a good idea of what is happening to the top 1% or 5%, but it averages together what is happening to the lower groups. This data is recomputed to give the first table above, "2006 Tax Data Split Into Separate AGI Slices".

Apr 24, 2009

Why Test? You Are Already in the Hospital

The "Too Sick to be in the Hospital" Test
04/24/09 - Throckmorton's Other Signs by Throckmorton

Bureaucracies are amazing. They divide responsibility and ignore obvious problems to satisfy some grand plan.

It seems that Medicare wants to cut down on unneeded testing. The answer: Don't give the test at all if the patient is in the hospital. That will do it!

[edited] Medicare will not pay for a PET or CT scan unless it is done as an outpatient. If the patient is really sick from their cancer and is in the hospital, they can't have the test, even though it would help determine how best to treat them so that they can get better and leave the hospital!

Diagnosing people is expensive. If they are already very sick, just what is the point? (sarcasm warning)

All people and organizations seek income and avoid costs. Socialized or centralized healthcare is paid up-front and delivers services after the fact. How hard will a system work to earn the money that they have already been paid? This is something that everyone can understand in their gut. A customer is lost without competition for his dollar.

Begging for Medical Care
The bureaucracy sees you as a cost, especially if you have already paid.

A Quick Explanation for the Recession

An Explanation for the Great Recession
03/25/09 - The Angry Economist

Warning. You will need some self confidence to read this explanation. It is short and understandable. You may tend to believe complicated presentations that you don't understand. Really, if you don't understand something, they haven't explained it very well, or they are hiding their own ignorance.

[edited] Austrian Economists can explain this recession in the same way that all the other ones are explained:

[ Sorry, you will have to go to the original article to find out. ]

What is Krugman (the moron) telling us that we need to do? Spend, spend, spend, don't save!

Every REAL economist will tell you that's stupid. Everyone believes Krugman only because he got a Nobel Prize back before his brain failed.

+ + + + +

Cargo Cult Economics
Obama's economic team says "Spend, Spend, Spend". They claim that government spending multiplies wealth. Actually, private spending AND SAVING has the same effect in creating a vibrant economy. Savings don't sit around being lazy at the bank. They provide the means to build businesses, employ people, and buy commercial goods.

Apr 21, 2009

We Can't Stop Carbon Emissions

From Peter Huber's book Bound to Burn
04/21/09 - ChicagoBoyz by Jonathan

[edited] We rich people can't make a lasting dent in emissions. We don't control the global supply of carbon.

We can't stop 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach. The 80% of humanity in the developing world desperately need cheap energy, and that will drive global carbon emissions. If we are foolish enough, we can impose carbon controls on ourselves that will send jobs and industries to their shores, making them grow even faster, and their carbon emissions faster still.

Ten countries ruled by nasty people control 80% of the planet's oil reserves, about 1 trillion barrels worth about $40 trillion. They can lift most of their oil for a cost under $10 a barrel. They will drill, pump, and find buyers. Oil is all they have.

The bad news is that we will have to adapt, if human production of CO2 is a problem. We won't be able to stop it. The good news is that CO2 is not a problem in the first place.

Dispelling the Global Warming Myth
The atmosphere warms and cools because of solar output, not carbon dioxide.

The Global Warming Hockey Stick Hoax
The data and computer models in support of global warming are poorly constructed and don't predict anything.

Apr 20, 2009

The Fake History of the Depression

The Fake History of the Depression
04/20/2009 - Mises Daily by Robert P. Murphy

His new book is "The Politically Incorrect Guide to the Great Depression and the New Deal".

[edited] Nobel laureates and presidential advisors proclaim that it was Herbert Hoover's free-market penny pinching that exacerbated the Depression. They say that the economy was saved only when FDR boldly ran up enormous deficits to fight the Nazis. But, this official history is utterly false.

Contrary to what you have heard, Hoover was a textbook Keynesian after the stock-market crash. He cut income tax rates for 1929 by one percentage point and increased federal spending by 42% from 1930 to 1932.

This enormous jump in spending occurred while tax receipts collapsed, due to the decline in economic activity and the price deflation of the early 1930s. This combination led to unprecedented peacetime deficits under the Hoover administration — something FDR railed against during the 1932 campaign!

Hoover spent $4.6 billion against only $2 billion in tax receipts. The 1932 deficit would translate into an astounding $3.3 trillion deficit in 2007 (instead of the actual deficit of $162 billion for that year). Hoover's 1932 deficit was 4% of GDP.

GDP is Gross Domestic Product, or total national income. The official government measures of rising GDP during the war years is misleading. Massive military spending was included in GDP, even though producing tanks is hardly the same measure of prosperity as producing consumer goods.

Normally, when the Fed prints money to buy massive quantities of goods (such as war supplies), the price level and cost of living goes through the roof. The price level is expressed as the CPI, the Consumer Price Index. The government applied price controls during the war. [ Price controls were either ineffective or produced shortages. -AG ]

Say that your salary goes up from $30,000 to $33,000, a 10% increase. But, the cost of what you buy goes up 10% also because of inflation. Your "inflation adjusted" income is still $30,000. The same applies to GDP, which is supposed to measure total income.

Statisticians would normally adjust for the price level to compute the "inflation adjusted" GDP. This adjustment couldn't occur, because the government made it illegal for the CPI to go through the roof. Official measures showing "real GDP" rising during World War II are as phony as the Soviet Union's announcements of industrial achievements.

+ + + + +

Building tanks and bombs doesn't make you rich. Building new infrastructure (bridges, roads, and railroads) only increases prosperity if it is highly useful. Just the building of the structures doesn't do a thing.

A Tested Stimulus Plan
The housing crisis is the result of our last stimulus plan. How do we like it?

Cargo Cult Economics
Spending and saving by individiuals is more "stimulative" than taxing and spending by government.

Apr 18, 2009

An Artwork Thought to Have Merit

Thought to Have Merit
06/20/06 - WSJ OpinionJournal by Lionel Shriver

An English sculptor loses his head.

[edited] In this year's summer show at London's Royal Academy of Arts, "Exhibit 1201" is a large rectangular tablet of slate with a tiny barbell-shaped bit of boxwood on top. Its creator, David Hensel, must be pleased to have been selected from among some 9,000 applicants for the world's largest open-submission exhibit of contemporary art.

Nevertheless, he was bemused to discover that in transit his sculpture had gotten separated from its slate base. The Royal Academy had judged the two components as different submissions. They rejected his artwork proper, a finely wrought laughing head in jesmonite. Instead, they honored the slate base and boxwood support. "It says something about the state of visual arts today," said Mr. Hensel. He didn't say what. He didn't need to.

The Royal Academy denies having made an error. The slate tablet and hastily carved wooden support were, according to an official statement, "thought to have merit."

The short piece of wood for supporting the sculpture was quite nice, in its own way. See pictures of the support and the laughing head.

Apr 16, 2009

We Must Spend or We Are Going to DIE!

From: Ruling Class
To : Public
Re : We must tax and spend now, or we are all going to DIE!

We don't want to tax and spend (cough), but we must react to the crisis that we have identified. We are going to borrow, spend, and tax reluctantly to support our actions. The alternative is DEATH. No one wants that.

So what if you are poor in the future? At least you will be alive, and we will continue to guide you through supportive government to help you out of poverty. We will create and assign the jobs of the 21st century. Your children will pay most of the taxes, and we are training our children to have the public spirit that will allow them to rule wisely.

We have heard no reasonable argument or plan to do anything else. It is irresponsible for some people to say that there is no crisis, or that our spending will not solve the crisis. If you don't have a plan, worked out in detail, ready to implement, with people in office who support you, then you have nothing to offer.

Who are you? If your ideas were important, you would be in office and be one of us, not part of the public. You didn't care enough to be elected, so don't complain now.

We think that you are complaining because you have some money in the bank. You should realize that most Americans don't have savings, so you are unnaturally well-off.

What you have is one vote, and we have more votes than you do. We are going to arrange for everyone to participate in the American Dream, not just those with savings. Learn to appreciate the simple life, and have some respect for the people who are duly elected.

Less carbon, more community!

A Tested Stimulus Plan
The housing crisis is the result of our last stimulus plan. How do we like it?

Apr 3, 2009

Contact Congressmen, Senators, and the President

Congressmen and Senators

Call the Congressional Switchboard. Ask to be connected to your congressman's or senator's office.

Read more ...

Pay to call:

 202-225-3121 Congressman 
 202-224-3121 Senator

Toll Free:

1   Listed once in sources visited on the web.
2   Listed 2+ times.
**  Listed many times as the main number.
xx  Discontinued.

1   800-417-7666
1   800-459-1887 
2   800-614-2803
2   800-828-0498
2   800-833-6354
1   800-862-5530
2   866-220-0044
1   866-338-1015 
2   866-340-9281
2   866-808-0065
2   877-210-5351
**  877-762-8762
2   877-851-6437
xx  888-355-3588
1   888-818-6641 

Congressmen and Senators

Find web pages for sending email to your representatives.
Also, phone and fax numbers.

Contact the President

The White House web page
A web contact page. There seems to be no toll-free number.

Comments:    202-456-1111
Switchboard: 202-456-1414
FAX:         202-456-2461

Comments:        202-456-6213
Visitors Office: 202-456-2121

Richard Epstein Discusses Barack Obama

Prof. Richard Epstein Discusses Barack Obama
04/02/09 - TV.NationalReview - Uncommon Knowledge with Peter Robinson (7:23)

Richard Epstein was a colleague of Barack Obama. This video is a discussion between Robinson and Epstein about Barack Obama's talents and shortcomings. The following is my edited transcript.

Richard A. Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, where he has taught since 1972.

Peter M. Robinson is a research fellow at the Hoover Institution, and the editor of Hoover’s quarterly journal "The Hoover Digest".

- - -

Robinson: You wrote in Forbes in Oct 2008,

I know Obama through our association at the University of Chicago Law School and through mutual friends in the neighborhood. We have had one or two serious substantive discussions, and when I sent him e-mails from time to time in the early days of his Senate term, he always answered in a sensible and thoughtful fashion.

And yet, for assessing the likely course of his presidency, I don't know him at all.

How can you say such a thing?

Epstein: It's very easy. Obama has the world's most perfect human disposition. He can sit in a room with you, he can listen to you, and he can talk to you, and you really get the sense of a man who is in complete self control.

But, that's the very feature that makes him so hard to read. He is so much in self control, that if he doesn't want you to know in a conversation what he is thinking, you can be there for 30 minutes and never be able to figure out what he believes. You can only have him question you about what you believe. He keeps all of his thoughts to himself.

Robinson: So, he is like Leonard Nimoy, like Spock, the Vulcan in Star Trek.

Epstein: He basically knows how to keep that shield over his face.

It is almost unnerving to talk to him, because you want to say "I agree with you", as opposed to having him ask another question so that he can understand your position a little better.

His speech is completely inconsistent with his political record. As a member of the Senate he had the most left wing voting record of anyone there. More so than people like Hillary Clinton. And that is, of course, the way he moves

Obama worked as a community organizer and was in many cases very constructive. He organized public/private partnerships to help the homeless and downtrodden.

But, the difficulty you get, for someone who has only worked in that situation, is that he believes the creation of private wealth is something the government cannot influence or destroy. He has many fancy redistribution schemes, in addition to his health plan and new labor laws, which are all wealth killers.

He is about to engage in a series of proposals to redistribute wealth that we do not have.

Robinson: You are quoted in the Boston Globe, "I like Obama but I reject the suggestion that he is an intellectual. He is an activist merely mimicking the mannerisms of an intellectual." How good is Obama's mind?

Epstein: His mind is pretty good, but it is a clever "means-ends" mind. He has never written a scholarly article in his entire life.

Robinson: He was President of the Harvard Law Review but never wrote an article.

Epstein: If he did, it was unsigned and not academically significant.

Robinson: Would you ever give him tenure at the University of Chicago Law School?

Epstein: No, no, no. Jody Cantor got this story from somebody, but it isn't true. We did not give Obama a tenured offer. Obama was such an engaging fellow, that we all, including me, would have offered him a tenured track position [not tenured, but leading to tenure if the work is high quality].

We never got to an offer. Obama has a high level of self-knowledge, as much as anyone I have ever met. He realized that he was not cut out for an academic career. It wasn't what he wanted.

Robinson: A headline in Politico last week reads Obama tightens reins on capital and says "President Barack Obama and his allies around Washington are about to give the capital a bracing lesson in one-party rule." Are you surprised?

Epstein: No. It's the same element, Obama is in complete control of himself. He is a fierce competitor and he likes to be in control of his environment.

His positions are not close to the middle, and so he sees no reason to compromise with Republicans unless and until they can mount a veto threat in the Senate. He is very, very dogmatic about his substantive positions. He knows what he believes and he knows why he believes it, and it is extremely difficult for people on the outside to change his mind.

The fundamental mistake of his entire world view is that he treats contracts as devices for exploitation and not as devices for mutual gain, and he assumes that redistribution can take place without any negative impact upon production.

If you live in that kind of a fairy land, which I think he does, every one of his major social and economic initiatives are going to misfire. And, if they succeed, God forbid, in getting through, they are going to intensify the downturn that we have already experienced. He is the wrong guy for the job based on his intellectual format. The question is whether you can force him back.

Robinson: He has a reputation as a brilliant orator. We now know that he will not give even brief remarks, the kinds of things that chief executives from Washington, through Reagan, through even George W. Bush would give with only a note card or even off the cuff, he won't speak without a teleprompter. How come?

Epstein: Same point. He is very much a man who wants to be in total control. The moment you start to improvise, you are like me, and you will start calling the President "this guy", and then you will say no, that's not the phrase I should have been using in this circumstance.

Robinson: Charles Krauthammer described the dinner that Obama attended at the home of George Will with a number of conservative journalists shortly before the inauguration.

Krauthammer said that after Obama left, some stayed around and talked for an hour or so, and they could not decide whether he was a centrist who wanted to throw bones to the Left, or a Leftist who was willing to throw bones to the center. Which is it?

Epstein: The reason they couldn't figure it out is the same thing that I mentioned before. Obama has a sort of stone-faced experience, and it is quite on purpose.

The answer is pretty clear. He is a man on the left who will, if necessary, throw bones to the center. He is not a man from the center. Some of the appointments of his may sound centrist. But again, I just don't believe in this as a serious indicator.

David Axelrod is a high powered politico. He has much more influence on anything that Obama does than someone like Lawrence Summers, who might have much more sense on these economic issues.

How do I know that? Well, I was certainly not there for the conversation. But, when I hear Larry Summers announce that collective bargaining and organized labor produces productivity, I don't treat that as a statement of an independent judgment. I treat that as a sense that if the administration is really strongly pro-labor you have to sort of throw some bones in that particular direction, as an independent advisor, in order to lend a certain degree of seriousness to what's happening.

The Obama I (Don't) Know
Oct 2008 - Forbes.com by Richard Epstein
About the inscrutable Obama and the bad effects of his proposals.

Leading the People
If You Don't Agree Now, You Will Later
People who want to lead you to a better world want control, committees, and universal participation. We all must pitch in.

Obama and God
When God talks to you through your inner voice, it is even better than prayer. Obama experiences this every day, in his own words.

How a Community Organizer Became President
01/14/10 - TCU Nation by dwood
Via Amused Cynic.

L. David Alinsky is the son of the famous Chicago radical, the late Saul D. Alinsky. The Boston Globe published his letter on 08/31/08 boasting that Barack Obama had made enormously effective use of his training in Saul Alinsky's methods.

David Alinsky [edited]: "I am proud to see that my father's organizing model is being applied to affect the 2008 Democratic campaign. It is a fine tribute to my father as we approach his 100th birthday. My father produced a powerful strategy for initiating change and making it really happen, when executed meticulously and thoughtfully. Obama learned his lesson well."

dwood:  Obama's most significant education was not at Columbia or Harvard Law, but the years he spent training in the Saul Alinsky system for community organizing, and teaching workshops on Alinsky's methods.

Apr 1, 2009

A Trillion Dollars On Display

What does one TRILLION dollars look like?
04/01/09 - PageTutor.com

The final graphic at the above link shows the volume of $1 trillion in $100 bills, stacked onto 10,000 shipping pallets. The graphic is 50 wide, 100 deep, and 2 high.

$1 trillion would buy 4 million houses, each house costing $250,000.

Fannie Mae and Freddie Mac are Government Sponsored Enterprises, and the biggest companies in the mortgage market. They borrowed $5.4 trillion to buy home mortgages and package them into bonds. At least $1.5 trillion were sub-prime mortgages, the ones most in trouble now. They set the standards for what was required for a loan. They did this under close government oversight, regulation, and approval. They are essentially departments of the government.

Private banks put together another $1.5 trillion of sub-prime mortgages, all under government oversight, regulation, and approval.

AIG went broke guaranteeing the value of private bonds built on mortgages that were entirely similar to those that Fannie and Freddie were buying and packaging into their own bonds. The credit rating agencies regarded these bonds as AAA, highest quality. Maybe this is why the government felt like bailing out AIG, since AIG was doing exactly what the government wanted it to do when it failed.

It is ridiculous for our legislators to claim that this crisis was caused by a "lack of regulation" of financial services. Consider the following when you hear cries for "more regulation" to keep such disasters from happening in the future, unless you mean more regulation of Congress.

  • The losses are concentrated in the institutions which were most directly regulated.
  • The regulation was done by congressional and senate committees, and by OHFEO, the requlatory agency created by Congress to control housing lenders.
  • Housing loans and housing policy were the most regulated parts of our economy.
  • Lenders were doing what the government wanted them to do, using decreasing credit standards for granting loans.

Financial Rescue Nears Value of Total GDP
03/31/09 - Bloomberg.com by Mark Pittman and Bob Ivry

The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

This money isn't yet lost, so it is not yet budgeted as an expense. I suspect that trillions will in fact be lost from these "stabilizations" and guarantees.

Spending on "stimulus" and new government programs will increase the cumulative deficit to $9.3 trillion by 2019, in addition to a $1.9 trillion increase in taxes over the same period. The Congressional Budget Office made these estimates. The CBO reports to Congress, and is now directed by the Democrats as the majority party.

It will be your job to pay it all back, or maybe your children's job.

The government isn't helping our country's problems. It caused our financial problems through guarantees and housing policy, and now it is making those problems bigger.

People in the private sector have the knowledge to unwind this mess. The government is discouraging them from acting, through unpredictable policies and massive borrowing that could ruin them.

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We Guarantee It
The government is guaranteeing us into poverty.

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Visualizing the US Debt
July 2011 - Demonocracy
Similiar graphics showing $1 trillion, and more showing the size of the US Debt. Did you guess higher than the Empire State Building in New York City?